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Item 1 : DOMESTIC NET COMMERCIAL INCOME
Domestic commercial net income is the net income according to Indonesian accounting principles, namely all incomes received and obtained from business activities and from non-business activities in
Indonesia including income imposed by Finalized Tax and non taxable object, deducted with expenditurescosts to obtain, bill, and maintain income in accordance with the Indonesian accounting
system and method which is followed consistently as reflected in the commercial financial statement, before adjusted according to Income Tax Law and its implementing regulations.
a. GROSS INCOME
Fill with the gross amount of business activities in Indonesia, after less of sales return and discount, for trade and industrial company in the taxable year concerned.
b. COST OF SALES
Fill with cost of sales from Taxpayer’s business activity. If according to accounting system and method followed by particular Taxpayers e.g. banks, pension fund, mutual fund, social organizations,
associations etc. there is no costs separation or classification for cost of sales, then all costs are reported into point c: others expenses.
c. OTHER OPERATING EXPENSES
Fill with expenses which are not included in cost of sales.
d. NET INCOME FROM BUSINESS 1a – 1b – 1c
Net income is calculated from sales deducted by cost of sales and others expenses.
e. INCOME FROM NON BUSINESS ACTIVITIES
Fill with gross amount of income received and or obtained from non business activities as stated in point a, for example: income from capital investment in Indonesia, gain from salestransfersleases of
assets, and other incomes which are not included in income from business activities or not related with business activities.
f. EXPENSES FROM NON BUSINESS ACTIVITIES
Fill with direct expenses relevant to the income from non business activities as stated in point e.
g. NET INCOME FROM NON BUSINESS ACTIVITIES 1e-1f
Fill with amount from point e deducted by point f.
h. Total 1d + 1g
Sufficiently clear
Item 2 : FOREIGN COMMERCIAL NET INCOME
Fill with the net income received or obtained from overseas as stated in special form 7A7B column 5 ‘Net Amount’.
Item 3 : TOTAL NET COMMERCIAL INCOME 1h + 2
Fill with net commercial income from domestic and overseas.
ATTACHMENT – I FORM 1771 – I AND FORM 1771 – I
CALCULATION OF FISCAL NET INCOME
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Item 4 : INCOME SUBJECT TO FINALIZED INCOME TAX AND NON TAXABLE INCOME
In order to calculate the net amount of taxable income according to general provisions, income from Indonesia which is imposed by Finalized Tax and non taxable objects must be deducted so as the net
taxable income number 8 will be zeronil. Fill with the commercial net income from income which is imposed by Finalized Tax and commercial net income from non taxable objects that has already been
recorded in number 1 form 1771-I; in case of experiencing commercial loss , fill with the amount of commercial loss.
Item 5 : POSITIVE ADJUSTMENTS
Positive adjusment for tax purpose is the adjustment of commercial net income excluding income which is imposed by Finalized Tax and non taxable objects in order to calculate Income Tax
according to Income Tax Law and its implementing regulations, which increases the income and or reduces commercial costs stated in number 1.
a. Adjustments based on Article 9 paragraph 1 subparagraph b of Income Tax Law, corporate expenditures to buyfix private houses or cars, privatefamily travel expenditures, privatefamily
insurance premium expenditures, and other expenditures for stockholders, partners, or members, must be excluded from corporate expenses.
b. Adjustments based on Article 9 Paragraph 1 Subparagraph c of Income Tax Law, the formation
and maintenance of reserved fund must be excluded from corporate expenses. However for certain businesses that economically requires to form reserved fund to cover expenses and loss
in the future, it is still allowed to consider it as expenses, but limited to:
1. Allowance for Doubtful Accounts for bank industry and other entity which is transferring a credit , leasing with option right, multifinance and factoring companies;
2. reserve for insurance, include reserve for social aids generated by Badan Penyelenggara Jaminan Sosial Committee of social Security
3. reserve of security for LPS 4. reserve of reclamation cost for mining sectors
5. reserve of replanting cost for forestry sector 6. reserve of shut-down and maintenance cost of the banishment of industrial waste for
industrial-waste processing sector See :
Minister of Finance Regulation Number 81 PMK.03 2009 . c. Pursuant to Article 4 Paragraph 3 Subparagraph d of Income Tax Law, consideration or
remuneration in the form of benefit in-kinds in relation with employment or services is not See :
Minister of Finance Regulation Number 83PMK.03 2009; d.
Adjustment pursuant to Article 9 Paragraph 1 Subparagraph f of Income Tax Law, payment of salary, honorarium, and other rewards referring to passed to service or work given to
stockholders or other related parties as stated in Article 18 Paragraph 4 of Income Tax Law, can be burdened as expense of a company as long as its amount does not exceed fairness.
Fairness is measured based on common standards for the same qualification of work which is done by non related parties. The difference exceeding fairness may be considered as distribution
of profit.
e. Pursuant to Article 4 Paragraph 3 Subparagraph a of Income Tax Law, aid or donation and grant received by religious bodies, education institutions, social bodies, or small enterprises
including cooperation as regulated by the Minister of Finance, are not considered income as long as there is no relationship based on business, employment, ownership, or control among related
parties. Therefore according to the taxability and deductibility principle, adjustment according to
6 Article 9 Paragraph 1 Subparagraph g of Income Tax Law, the aid or donation and grant given
by Taxpayers can not be burdened as expenses. See :
Minister of Finance Decree Number 604KMK.041994.
Tithe or Zakat paid by corporate Taxpayer owned by moslem can be deducted from gross income to calculate Taxable Income under these conditions:
The taxable income entitled to be tithed has already been reported in the Annual Tax Return;
The zakat is delivered through Amil Zakat Body BAZ or Amil Zakat Institution LAZ formed or
approved by CentralLocal Government; Therefore non income zakat and zakat from income which does not fulfil those conditions above are
not allowed to be burdened as expense. f.
Adjustments pursuant to Article 9 Paragraph 1 Subparagraph h of Income Tax Law, Income Tax and Tax Credit are not considered as company’s expenses.
g. Pursuant to Article 4 Paragraph 3 Subparagraph i of Income Tax Law, part of a profit received or obtained by member of partnership whose capital is not divided into shares, partnership,
association, firms, and kongsi is not considered as income. Therefore according to taxability and deductibility principle, the adjustment pursuant to Article 9 Paragraph 1 Subparagraph j of
Income Tax Law, for those stated entities, payment of salary to their members can not be burdened as expenses.
h. Adjustments pursuant to Article 9 Paragraph 1 Subparagraph k of Income Tax Law, administrative penalty in terms of interests, fines, and increases of tax, and criminal penalties in
terms of fines following tax laws are not considered expenses to the company. i.
Fill according to Special Attachment of I A I B list of Depreciation and Amortization Fiscal. j.
Fill according to Special Attachment of I A I B list of Depreciation and Amortization Fiscal. k. Adjustments pursuant to Article 7 Government Regulation Number 138 of 2000, DGT Decree
may determine certain times for cost recognation for certain Taxpayers following the Government policy.
See : DGT Decree Number Kep- 184PJ.2002; DGT Circular Number SE- 08PJ.422002.
l. Adjustments according to general provision article 4 and Article 6 and their implementing
